Write the letter of your choice on the space provided before each number. Thus, A – if only the 1st statement is CORRECT; B- if only the 2ND statement is CORRECT; C- if both 1st and 2nd statements are CORRECT and D- if both 1st and 2nd statements are INCORRECT. _____ 1. Tax is an instrument of fiscal policy. It is the inherent power of the state to demand enforced contributions from the people for public purposes. _____ 2. Theoretical Justice refers to the “ability to pay” principle. This means that tax burden must be proportion to the taxpayer’s level of income. _____ 3. Indirect Taxes are taxes levied by the government on goods and services in order to raise revenue. These taxes cannot be shifted on to consumers.
Write the letter of your choice on the space provided before each number. Thus, A – if only the 1st statement is CORRECT; B- if only the 2ND statement is CORRECT; C- if both 1st and 2nd statements are CORRECT and D- if both 1st and 2nd statements are INCORRECT.
_____ 1. Tax is an instrument of fiscal policy. It is the inherent power of the state to demand enforced contributions from the people for public purposes.
_____ 2. Theoretical Justice refers to the “ability to pay” principle. This means that tax burden must be proportion to the taxpayer’s level of income.
_____ 3. Indirect Taxes are taxes levied by the government on goods and services in order to raise revenue. These taxes cannot be shifted on to consumers.
_____ 4. Progressive taxes place a greater burden on those best able to pay. Value added tax is a progressive tax.
_____ 5. Proportional taxes are taxes levied at a constant rate. These taxes place an equal burden on the rich, the middle class, and the poor.
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